Eco 550 Week 1

Eco 550 Week 1

McGuigan Chapter 1—Introduction and Goals of the Firm
Only for this spring quarter 2013, quiz purposes

MULTIPLE CHOICE

1. The form of economics most relevant to managerial decision-making within the firm is:
a.|macroeconomics|
b.|welfare economics|
c.|free-enterprise economics|
d.|microeconomics|
e.|none of the above|

2. If one defines incremental cost as the change in total cost resulting from a decision, and incremental revenue as the change in total revenue resulting from a decision, any business decision is profitable if:
a.|it increases revenue more than costs or reduces costs more than revenue|
b.|it decreases some costs more than it increases others (assuming revenues remain constant)|
c.|it increases some…show more content…

Agency problems and costs are incurred whenever the owners of a firm delegate decision-making authority to management.
a.|true|
b.|false|

10. Income tax payments are an example of ____.
a.|implicit costs|
b.|explicit costs|
c.|normal return on investment|
d.|shareholder wealth|
e.|none of the above|

11. The common factors that give rise to all principal-agent problems include the
a.|unobservability of some manager-agent action|
b.|presence of random disturbances in team production|
c.|the greater number of agents relative to the number of principals|
d.|a and b only|
e.|none of the above|

12. The Saturn Corporation (once a division of GM) was permanently closed in 2009. What went wrong with Saturn?
a. Saturn’s cars sold at prices higher than rivals Honda or Toyota, so they could not sell many cars.
b. Saturn sold cars below the prices of Honda or Toyota, earning a low 3% rate of return.
c. Saturn found that young buyers of Saturn automobiles were very loyal to Saturn and GM.
d. Saturn implemented a change management view that helped make first time Saturn purchasers trade up to Buick or Cadillac.
e. all of the above

13. Which of the following will increase (V0), the shareholder wealth maximization model of the firm: V0∙(shares

Article analysis:
Pump Prices and Oil Prices: A Tale of Two Different Directions
By
Ernest Guillen
University of Phoenix
ECO/365 Ver.4 Principles of Microeconomics
Instructor: Dr. Christina Espinoza-Alguera
Abstract:
The following article is regarding what is most important to everyone around us regarding the pricing for gasoline at the pumps. This is a topic that concerns most people on this planet, why are the prices for gasoline so high and is it regarding the greed of…

Making Decisions Based on Demand and Forecasting
Sylvia Evans
Dr. Elkanah Faux
ECO 550
January 27, 2013
Strayer University
In this assignment I will be discussing the t that Domino’s is considering entering the marketplace in my community of Waynesboro, GA. I have conducted research to gather information in regards to demand for this business based on population, average income per household and average cost of pizza in this particular area. The end results of this research and demand analysis…

Demand Estimation
Debbie Allen
ECO 550
August 10, 2014
Dr. Lundondo Mumeka
Demand Estimation
In this essay I will assume the role as an employee for the maker of a leading brand of low-calorie, frozen microwavable food chain. Using the data from 26 supermarkets around the country for the month of April and the equation data that has been provided to me, I will compute the elasticity for each independent variable as well as determine the implications for each of the computed elasticities for…

Week 1 – DQ
Identify economic factors that affect the real GDP, the unemployment rate, the inflation rate, and a key interest rate. How do you predict the economy will perform in the next two years given the current state of two of the economic factors you identified? How might your organization be affected by these changes?
Response #1
There are many factors that affect the real GDP such as interest rates, consumer's confidence in spending and/or asset prices. When it comes to interest…

Question 1
1. When multiple facts about a sample set are known, a(n) _____ heuristic makes the choice on the basis of the first category of facts in which the samples differ.
elimination
representative
recognition
availability
Question 2
1. Which of the following products can be sold through mass advertising?
A new electrocardiogram machine to be used by medical examiners
A mainframe computer installation
A new health insurance policy
A new brand of baby diapers…

Strayer University ECO 550 Week 1 Homework
Chapter 1
2. A principal-agent relationships involves the owners (principals) delegating decision-making authority to managers (agents). A conflict occurs when the agents pursue acceptable levels of shareholder wealth and profit rather than a maximization of profit. They are pursuing their own self-interests. One way that the agents act in their own self-interests would be by focusing on long-term job security. This could cause the agents to limit…

ACC-550 / Week 1 Homework
CHAPTER 1
CA1-1 (FASB and Standard-Setting) Presented below are four statements which you are to identify as true or false. If false, explain why the statement is false.
1. GAAP is the term used to indicate the whole body of FASB authoritative literature. True
2. Any company claiming compliance with GAAP must comply with most standards and interpretations but does not have to follow the disclosure requirements. False (all companies must comply to all standards and…

Question 1 3 out of 3 points
To reduce Agency Problems, executive compensation should be designed to:
Correct Answer: create incentives so that managers act like owners of the firm.
Question 2 3 out of 3 points
In the shareholder wealth maximization model, the value of a firm's stock is equal to the present value of all expected future ____ discounted at the stockholders' required rate of return.
Correct Answer: profits (cash flows)
Question 3 3 out of 3 points
The…